Is Boeing (NYSE:BA) back?

The good
Investors thrilled at Boeing's earnings news this week, and for good reason. Boeing closed out a mostly unremarkable year on a high note, posting fourth-quarter numbers that were remarkable:

  • Revenue leapt 42% from Q4 2008.
  • Operating margins swung from 1.9 points in the red to 9.4% in the black.
  • The bottom line, too, came roaring back, as Boeing netted $1.3 billion in profits.
  • Best of all, operating cash flow surged to $3.2 billion.

And while the numbers for 2009 as a whole looked a whole lot weaker (sales up 12%, but margins and profits cut roughly in half), on balance, Boeing's position looks more secure now than it did last year. Free cash flow for 2009 totaled $4.4 billion (more than three times reported profits). In combination with Boeing's successful tapping of the credit markets, this left the company with an $11.2 billion war-chest at year-end ... alongside $12.2 billion in debt.

The bad
Of course, the news wasn't all good. Take Boeing's boast that backlog now amounts to "over four times current annual revenue" for example. It's a true statement, but ... at $316 billion, Boeing's backlog also amounts to 10% less than it was bragging about just one year ago.

While Boeing's improved sales undoubtedly explain some of the drawdown, it's also true that Boeing's order book shifted into reverse last year, as Dreamliner delays sparked cancellations among its customer base. While big buyers like Delta (NYSE:DAL), Continental (NYSE:CAL), and AIG's (NYSE:AIG) International Lease Finance subsidiary still have purchases planned, other customers are using their erasers a whole lot more than their pencil points.

Australian airliner Qantas has already wiped 15 Dreamliners off its order sheet, a figure that could rise to 30, headlining a total of nearly five dozen 787 cancellations last year. Meanwhile, Ireland's Ryanair (NASDAQ:RYAAY) is playing hard to get with a hoped-for order for 200 737s.

And the [not so] ugly
Give credit to Boeing, therefore, for its efforts to stop the bleeding quickly. It's got the Dreamliner airborne now, and it's working feverishly toward getting FAA certification. Boeing hopes to begin deliveries to long-suffering Dreamliner customers late this year, and management projects that cash flow will drop to zero as it ramps up parts purchasing. (That rustling sound you hear is the accounting teams at Honeywell (NYSE:HON) and United Technologies (NYSE:UTX), counting the money they hope to make.)

Within a year, though, we should see cash flow reverse, and revive to as much as $5 billion in 2011. Here's hoping, Boeing.

Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.